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Malaysian Banking Law: Meaning of “Customer” in Banking Law
Case Scenario
Sarah opens a savings account with a bank in Malaysia. At the same time, another person, Amir, only takes a loan from the same bank without depositing any money. A dispute arises, and the issue is whether both Sarah and Amir are considered “customers” under banking law.
Paraphrased Explanation (Q&A Format – Simplified & Clear)
Q1: Why is it important to define who a “customer” is?
Banking law mainly governs the relationship between a bank and its customer. Therefore, to understand rights and duties (like confidentiality, duty of care, etc.), we must first know who qualifies as a customer.
Q2: Does the Financial Services Act 2013 define “customer”?
No. The Act does not provide a direct definition of the term “customer.”
Q3: What term does the Act define instead?
The Act defines “depositor”, which refers to a person who is entitled to repayment of money placed with the bank, regardless of who originally deposited it.
Q4: What is the difference between a “customer” and a “depositor”? (Simple explanation)
👉 A depositor:
Q5: Can someone be a customer without depositing money?
Yes. A person can still be a customer if they:
Amir (borrower only) is still a customer, even though he is not a depositor.
Application
✔ Customer includes:
Customer = wider category
Depositor = narrower category
Critical Analysis (Simple Understanding)
The law intentionally keeps the term “customer” broad. This ensures that all individuals dealing with banks—whether depositing money or borrowing—are protected under banking law. If the definition were limited only to depositors, borrowers and other users of banking services would be excluded from important legal protections.
Resolution of the Case Scenario
Both are customers, even though only Sarah is a depositor.
Final Exam Rule
A “customer” is a broader concept than a “depositor”; while a depositor is entitled to repayment of deposits, a customer includes any person who has a banking relationship with the bank, including borrowers and users of banking services.
Case Scenario
Sarah opens a savings account with a bank in Malaysia. At the same time, another person, Amir, only takes a loan from the same bank without depositing any money. A dispute arises, and the issue is whether both Sarah and Amir are considered “customers” under banking law.
Paraphrased Explanation (Q&A Format – Simplified & Clear)
Q1: Why is it important to define who a “customer” is?
Banking law mainly governs the relationship between a bank and its customer. Therefore, to understand rights and duties (like confidentiality, duty of care, etc.), we must first know who qualifies as a customer.
Q2: Does the Financial Services Act 2013 define “customer”?
No. The Act does not provide a direct definition of the term “customer.”
Q3: What term does the Act define instead?
The Act defines “depositor”, which refers to a person who is entitled to repayment of money placed with the bank, regardless of who originally deposited it.
Q4: What is the difference between a “customer” and a “depositor”? (Simple explanation)
👉 A depositor:
- Someone who puts money into the bank
- Has the right to get that money back
- A broader concept
- Includes anyone who has a banking relationship
- All depositors = customers
❌ Not all customers = depositors
Q5: Can someone be a customer without depositing money?
Yes. A person can still be a customer if they:
- Take a loan
- Use banking services
- Enter into financial agreements with the bank
Amir (borrower only) is still a customer, even though he is not a depositor.
Application
✔ Customer includes:
- Depositors
- Borrowers
- Account holders
- Users of banking services
- Only those entitled to repayment of deposits
Customer = wider category
Depositor = narrower category
Critical Analysis (Simple Understanding)
The law intentionally keeps the term “customer” broad. This ensures that all individuals dealing with banks—whether depositing money or borrowing—are protected under banking law. If the definition were limited only to depositors, borrowers and other users of banking services would be excluded from important legal protections.
Resolution of the Case Scenario
- Sarah (depositor) → ✔ Customer
- Amir (borrower only) → ✔ Customer
Both are customers, even though only Sarah is a depositor.
Final Exam Rule
A “customer” is a broader concept than a “depositor”; while a depositor is entitled to repayment of deposits, a customer includes any person who has a banking relationship with the bank, including borrowers and users of banking services.
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KembaraXtra – Indian Evidence Law – Bharatiya Sakshya Adhiniyam – Admissions by Persons Whose Position Must Be Proved (Section 17)
1. General Rule
If a case depends on someone else’s liability, then what that person says becomes relevant.
2. Core Principle👉 When liability of one party depends on liability of another, statements of that other person become admissions.
3. Example
4. Scope of Section
5. Essential ConditionsTo apply Section 17, all must be satisfied:
6. Important Limitation❌ Statement NOT relevant if:
7. Key Concept👉 Third person’s statement becomes admissible because:
Quick Revision Line👉 If your liability depends on another person, his statement about that liability can be used against you.
1. General Rule
- Statements made by a third person are treated as admissions
- Only when that person’s position or liability is in issue in the case
If a case depends on someone else’s liability, then what that person says becomes relevant.
2. Core Principle👉 When liability of one party depends on liability of another, statements of that other person become admissions.
3. Example
- A is agent of B (collects rent)
- B sues A for not collecting rent from C
- A says: “C did not owe rent”
- C earlier said: “I owe rent to B”
4. Scope of Section
- Applies where:
- Rights/liability of one party depends on third party’s liability
- Common situations:
- Agent–Principal
- Debtor–Creditor
- Contract through third person
5. Essential ConditionsTo apply Section 17, all must be satisfied:
- Relationship must exist
- Between parties (e.g., agent–principal)
- Third person’s liability must be in issue
- Case outcome depends on that liability
- Statement must relate to that liability
- Statement must be made during existence of liability
- If liability ended (e.g., time-barred) → NOT relevant
6. Important Limitation❌ Statement NOT relevant if:
- Made after liability ceased
- Example: Debt already time-barred
7. Key Concept👉 Third person’s statement becomes admissible because:
- It directly affects legal rights of parties in dispute
Quick Revision Line👉 If your liability depends on another person, his statement about that liability can be used against you.
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KembaraXtra – Indian Evidence Law – Bharatiya Sakshya Adhiniyam – Proof of Admissions (Section 19)
1. General Rule
2. Exceptions (When Admission Can Be Used in Favour of Maker)(1) When Maker is Dead (Section 26 Principle)
(2) Statement as to State of Mind or Body
(3) Relevant Otherwise Than as Admission
3. Key Illustrative Principles
4. Self-Serving Statements (Exception Cases)Self-serving statements are allowed only in 3 cases:
5. Core Principle👉 Admissions are evidence against the maker, not in his favour — unless special exceptions apply.
Quick Revision Line👉 You cannot use your own admission to help yourself, except in limited situations (dead person, state of mind, or independent relevance).
1. General Rule
- Admissions are relevant and can be proved AGAINST the maker
- But they cannot be proved BY or ON BEHALF of the maker
- A person’s admission can be used against him
- But generally, he cannot use his own admission in his favour
2. Exceptions (When Admission Can Be Used in Favour of Maker)(1) When Maker is Dead (Section 26 Principle)
- Admission can be proved if it would be relevant when the maker is dead
- Based on necessity and unavailability
- Entries made in business records by deceased person → admissible
(2) Statement as to State of Mind or Body
- Must satisfy:
- Relates to state of mind/body (e.g., intention, knowledge)
- Made at or about the time
- Supported by conduct making falsehood unlikely
(3) Relevant Otherwise Than as Admission
- If statement is independently relevant under Sections 4–11, it can be used
- Even if it is also an admission
- Statement explaining conduct or possession can be admitted
3. Key Illustrative Principles
- A cannot prove his own statement to support his case
- But opponent can use it against him
- A says deed is genuine → B can use it
- But A cannot rely on his own statement
4. Self-Serving Statements (Exception Cases)Self-serving statements are allowed only in 3 cases:
- When admissible under Section 26 (dead person rule)
- When showing state of mind/body
- When independently relevant under other provisions
5. Core Principle👉 Admissions are evidence against the maker, not in his favour — unless special exceptions apply.
Quick Revision Line👉 You cannot use your own admission to help yourself, except in limited situations (dead person, state of mind, or independent relevance).
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Malaysian Banking Law: “Banking Business” — Islamic Financing and Licensing Requirements
Case Scenario
A financial institution in Malaysia provides Islamic financing through a Murabaha arrangement, where it purchases goods and resells them to a customer at a profit. When the customer fails to pay, the institution seeks repayment. The customer argues that the agreement is illegal because the institution is allegedly carrying on banking business without a licence. The court must determine whether providing such financing amounts to “banking Business”
Q1: What was the main issue in Light Style Sdn Bhd v KFH Ijarah House (Malaysia) Sdn Bhd?
The court had to decide whether the defendant, by providing Islamic financing through a Murabaha Sale Agreement, was carrying on banking business without a licence and whether the agreement was therefore illegal.
Q2: What was the plaintiff’s argument?
The plaintiff argued that the defendant was effectively acting like a bank because it provided financing facilities. Since the defendant allegedly did not have the required licence under the Banking and Financial Institutions Act 1989, the plaintiff claimed that the agreement was illegal and unenforceable. In simple terms:
👉 “If you provide financing like a bank, then you must be a bank — and without a licence, the agreement is invalid.”
Q3: What did the court decide?
The court rejected this argument and held that providing financing alone does not amount to banking business. The judge explained that banking business requires a combination of activities—namely accepting deposits, handling cheques, and providing financing. Since the defendant only provided financing and did not accept deposits or operate accounts, it was not carrying on banking business. Therefore, no banking licence was required, and the agreement was valid.
Judicial Proceedings
The court emphasised that under the statutory definition, the elements of banking business must be read together (conjunctively) rather than separately. This means that performing only one activity—such as providing financing—is not sufficient to constitute banking business. The judge highlighted that banking involves a system of interrelated functions, particularly deposit-taking and payment services, which were absent in this case.
The court also considered established judicial principles, including those from United Dominions Trust Ltd v Kirkwood, which describe banking as involving continuous account relationships, cheque handling, and financial intermediation. These elements were not present in the defendant’s activities.
Additionally, the court noted that even if there had been a technical breach of the law, section 125 of the statute would prevent the agreement from being automatically void. This reflects a legislative intention to preserve commercial transactions where possible.
Application (Note Form)
✔ Banking business requires:
Financing alone ≠ Banking business
All elements must exist together
Comparison with Earlier Cases
From Vernes Asia Ltd v Trendale Investment Pte Ltd
→ Lending alone is insufficient
From Sabah Development Bank Bhd v SKBS (Sabah) Sdn Bhd
→ Financier is not necessarily a banker
From Koh Kim Chai v Asia Commercial Banking Corporation Limited
→ Making advances alone is not banking
👉 Common principle:
Banking requires a combination of core functions
Critical Analysis (Simple Understanding)
This case strongly reinforces a strict statutory interpretation. The court makes it clear that the definition of banking business is not flexible or optional--all required elements must be present. This prevents ordinary financing arrangements, including Islamic finance structures, from being wrongly classified as banking activities.
It also reflects commercial reality. Many financial institutions provide financing without being banks. Treating all such activities as banking would unnecessarily restrict legitimate business operations.
Resolution of the Case Scenario
The defendant was NOT carrying on banking business
✔ The agreement is valid
✔ The debt is enforceable
✔ No breach of law
Final Exam Rule (Very Important)
Providing financing alone, including Islamic financing arrangements, does not constitute banking business; banking business requires the combined performance of deposit-taking, payment handling, and financing activities.
Case Scenario
A financial institution in Malaysia provides Islamic financing through a Murabaha arrangement, where it purchases goods and resells them to a customer at a profit. When the customer fails to pay, the institution seeks repayment. The customer argues that the agreement is illegal because the institution is allegedly carrying on banking business without a licence. The court must determine whether providing such financing amounts to “banking Business”
Q1: What was the main issue in Light Style Sdn Bhd v KFH Ijarah House (Malaysia) Sdn Bhd?
The court had to decide whether the defendant, by providing Islamic financing through a Murabaha Sale Agreement, was carrying on banking business without a licence and whether the agreement was therefore illegal.
Q2: What was the plaintiff’s argument?
The plaintiff argued that the defendant was effectively acting like a bank because it provided financing facilities. Since the defendant allegedly did not have the required licence under the Banking and Financial Institutions Act 1989, the plaintiff claimed that the agreement was illegal and unenforceable. In simple terms:
👉 “If you provide financing like a bank, then you must be a bank — and without a licence, the agreement is invalid.”
Q3: What did the court decide?
The court rejected this argument and held that providing financing alone does not amount to banking business. The judge explained that banking business requires a combination of activities—namely accepting deposits, handling cheques, and providing financing. Since the defendant only provided financing and did not accept deposits or operate accounts, it was not carrying on banking business. Therefore, no banking licence was required, and the agreement was valid.
Judicial Proceedings
The court emphasised that under the statutory definition, the elements of banking business must be read together (conjunctively) rather than separately. This means that performing only one activity—such as providing financing—is not sufficient to constitute banking business. The judge highlighted that banking involves a system of interrelated functions, particularly deposit-taking and payment services, which were absent in this case.
The court also considered established judicial principles, including those from United Dominions Trust Ltd v Kirkwood, which describe banking as involving continuous account relationships, cheque handling, and financial intermediation. These elements were not present in the defendant’s activities.
Additionally, the court noted that even if there had been a technical breach of the law, section 125 of the statute would prevent the agreement from being automatically void. This reflects a legislative intention to preserve commercial transactions where possible.
Application (Note Form)
✔ Banking business requires:
- Accepting deposits
- Maintaining accounts
- Paying and collecting cheques
- Providing finance (as part of a system)
- Providing financing only
- Islamic financing (Murabaha) alone
- Single or isolated financial activity
Financing alone ≠ Banking business
All elements must exist together
Comparison with Earlier Cases
From Vernes Asia Ltd v Trendale Investment Pte Ltd
→ Lending alone is insufficient
From Sabah Development Bank Bhd v SKBS (Sabah) Sdn Bhd
→ Financier is not necessarily a banker
From Koh Kim Chai v Asia Commercial Banking Corporation Limited
→ Making advances alone is not banking
👉 Common principle:
Banking requires a combination of core functions
Critical Analysis (Simple Understanding)
This case strongly reinforces a strict statutory interpretation. The court makes it clear that the definition of banking business is not flexible or optional--all required elements must be present. This prevents ordinary financing arrangements, including Islamic finance structures, from being wrongly classified as banking activities.
It also reflects commercial reality. Many financial institutions provide financing without being banks. Treating all such activities as banking would unnecessarily restrict legitimate business operations.
Resolution of the Case Scenario
- The defendant only provided financing ✔
- It did not accept deposits ❌
- It did not operate accounts ❌
- It did not handle cheques ❌
The defendant was NOT carrying on banking business
✔ The agreement is valid
✔ The debt is enforceable
✔ No breach of law
Final Exam Rule (Very Important)
Providing financing alone, including Islamic financing arrangements, does not constitute banking business; banking business requires the combined performance of deposit-taking, payment handling, and financing activities.
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Malaysian Banking Law: Section 125 BAFIA and Its Link to the Financial Services Act 2013
Case Scenario
A borrower in Malaysia challenges a financing agreement, arguing that the lender did not comply with banking regulations. The borrower claims the contract should be void. The court must decide: does a breach of banking law automatically invalidate the agreement?
Q1: What is Section 125 of the Banking and Financial Institutions Act 1989?
Section 125 states that a contract will not automatically become void just because it breaches the Act.
👉 In simple terms:
Even if a transaction does not fully comply with banking law, the agreement itself can still remain valid and enforceable.
Q2: Why is Section 125 important?
Without this section:
✔ Commercial certainty
✔ Fairness between parties
Q3: How does this apply in cases like Light Style Sdn Bhd v KFH Ijarah House (Malaysia) Sdn Bhd?
The court said:
👉 Even if the transaction had breached banking law (which it did not),
✔ Section 125 would still protect the agreement
So:
Link with Current Law: Financial Services Act 2013
Q4: What replaced BAFIA?
The Financial Services Act 2013 replaced BAFIA and now governs banking regulation in Malaysia.
Q5: Does the same principle still exist under the Financial Services Act 2013?
Yes — the same idea continues.
👉 The law still aims to:
Key Understanding
✔ Regulatory breach ≠ Contract automatically void
👉 The Act focuses on:
Application (Note Form)
✔ Section 125 principle:
Critical Analysis
This rule is very important for commercial stability.
👉 If every illegal technical breach made contracts void:
👉 Regulation (public law)
vs
👉 Contract enforcement (private law)
Resolution of the Case Scenario
Final Exam Rule (Very Important)
A breach of banking law does not automatically render a contract void; under Section 125 BAFIA (and its modern equivalent under the Financial Services Act 2013), financial agreements remain enforceable unless expressly declared void by law.
Case Scenario
A borrower in Malaysia challenges a financing agreement, arguing that the lender did not comply with banking regulations. The borrower claims the contract should be void. The court must decide: does a breach of banking law automatically invalidate the agreement?
Q1: What is Section 125 of the Banking and Financial Institutions Act 1989?
Section 125 states that a contract will not automatically become void just because it breaches the Act.
👉 In simple terms:
Even if a transaction does not fully comply with banking law, the agreement itself can still remain valid and enforceable.
Q2: Why is Section 125 important?
Without this section:
- Many financial contracts could be cancelled easily
- Borrowers could avoid repayment by claiming illegality
✔ Commercial certainty
✔ Fairness between parties
Q3: How does this apply in cases like Light Style Sdn Bhd v KFH Ijarah House (Malaysia) Sdn Bhd?
The court said:
👉 Even if the transaction had breached banking law (which it did not),
✔ Section 125 would still protect the agreement
So:
- The borrower cannot escape liability
- The debt remains payable
Link with Current Law: Financial Services Act 2013
Q4: What replaced BAFIA?
The Financial Services Act 2013 replaced BAFIA and now governs banking regulation in Malaysia.
Q5: Does the same principle still exist under the Financial Services Act 2013?
Yes — the same idea continues.
👉 The law still aims to:
- Regulate financial institutions
- BUT not automatically invalidate contracts
Key Understanding
✔ Regulatory breach ≠ Contract automatically void
👉 The Act focuses on:
- Punishing non-compliance (fines, penalties)
- NOT destroying private agreements
Application (Note Form)
✔ Section 125 principle:
- Contracts remain valid despite breach
- Protects lenders and financial system
- Prevents borrowers from avoiding repayment
- Same approach continues
- Licensing rules enforced separately
- Contracts generally still enforceable
Critical Analysis
This rule is very important for commercial stability.
👉 If every illegal technical breach made contracts void:
- Banking system would collapse
- Loans could not be enforced
- Borrowers could act unfairly
👉 Regulation (public law)
vs
👉 Contract enforcement (private law)
Resolution of the Case Scenario
- Even if there was a breach ✔
- The agreement is still valid ✔
- The borrower must repay ✔
Final Exam Rule (Very Important)
A breach of banking law does not automatically render a contract void; under Section 125 BAFIA (and its modern equivalent under the Financial Services Act 2013), financial agreements remain enforceable unless expressly declared void by law.
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Malaysian Banking Law: Definition of a “Bank” under the Financial Services Act 2013
Direct Answer
Under the Financial Services Act 2013:
👉 There is NO single section that directly defines the word “bank.”
How the Act Defines a Bank (Step-by-Step Understanding)
1. Section 2(1): Key Definitions
Instead of defining “bank” directly, the Act defines:
👉 “licensed bank”
= a person licensed under section 10 to carry on banking business
2. Section 10: Licensing Requirement
👉 Section 10 states:
A person must obtain a licence to carry on banking business
3. Section 2(1): “Banking business”
The Act defines banking business as:
Put It Together (Very Important)
👉 A “bank” under the Financial Services Act 2013 means:
✔ A licensed bank
✔ Which is authorised under section 10
✔ To carry on banking business
Simplified Definition (Exam Ready)
A bank under the Financial Services Act 2013 is a person licensed under section 10 to carry on banking business as defined in section 2(1).
Important Insight
👉 The Act uses an indirect definition approach:
Link to Your Previous Cases
This matches what courts said:
✔ “Bank” = licensed + full banking functions
Final Exam Rule
Under the Financial Services Act 2013, a bank is not expressly defined but is understood as a licensed person under section 10 authorised to carry on banking business as defined in section 2(1).
Direct Answer
Under the Financial Services Act 2013:
👉 There is NO single section that directly defines the word “bank.”
How the Act Defines a Bank (Step-by-Step Understanding)
1. Section 2(1): Key Definitions
Instead of defining “bank” directly, the Act defines:
👉 “licensed bank”
= a person licensed under section 10 to carry on banking business
2. Section 10: Licensing Requirement
👉 Section 10 states:
A person must obtain a licence to carry on banking business
3. Section 2(1): “Banking business”
The Act defines banking business as:
- Accepting deposits
- Paying/collecting cheques
- Providing finance
- Other prescribed activities
Put It Together (Very Important)
👉 A “bank” under the Financial Services Act 2013 means:
✔ A licensed bank
✔ Which is authorised under section 10
✔ To carry on banking business
Simplified Definition (Exam Ready)
A bank under the Financial Services Act 2013 is a person licensed under section 10 to carry on banking business as defined in section 2(1).
Important Insight
👉 The Act uses an indirect definition approach:
- It does NOT say “bank = …”
- Instead, it defines:
- banking business
- licensed bank
Link to Your Previous Cases
This matches what courts said:
- Sabah Development Bank Bhd v SKBS (Sabah) Sdn Bhd
→ Not every lender is a bank - Light Style Sdn Bhd v KFH Ijarah House (Malaysia) Sdn Bhd
→ Financing alone ≠ banking
✔ “Bank” = licensed + full banking functions
Final Exam Rule
Under the Financial Services Act 2013, a bank is not expressly defined but is understood as a licensed person under section 10 authorised to carry on banking business as defined in section 2(1).
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Malaysian Banking Law: Is Cheque Handling Essential? (Linked Case Law)
👉 NO — cheque handling is NOT essential to be a banker
1. Traditional View (Older Position)
From:
👉 Suggested bankers usually:
✔ This created the impression that cheques are essential
2. BUT This View Was Rejected (Important Cases)
Key Case: No Need for Cheques
From:
👉 The court held:
✔ A bank can still be a banker
❌ Even if it does NOT issue cheque books
3. Supporting Cases (Flexible Approach)
Also supported by:
👉 These cases show:
✔ Cheques are NOT essential
✔ Methods of banking can vary
4. Why courts say cheques are not necessary (Simple explanation)
👉 Because banking evolves
Today:
👉 Replace cheques
So courts focus on:
✔ Function (handling money)
NOT
❌ Form (cheques specifically)
5. Link to Malaysian Law
Under:
👉 “Paying and collecting cheques” is mentioned
BUT
👉 Courts interpret this flexibly
✔ Includes modern payment systems
6.
Although earlier cases such as United Dominions Trust v Kirkwood identified cheque handling as a characteristic of banking, later cases such as R v Industrial Disputes Tribunal, ex parte East Anglian Trustee Savings Bank established that cheque facilities are not essential. The courts now adopt a functional approach, recognising modern payment methods as substitutes
7. Final Rule
Cheque handling is not an essential requirement of banking; what matters is the institution’s role in managing customer funds and facilitating payments, whether through traditional or modern means.
👉 NO — cheque handling is NOT essential to be a banker
1. Traditional View (Older Position)
From:
- United Dominions Trust Ltd v Kirkwood
👉 Suggested bankers usually:
- Pay cheques
- Collect cheques
- Maintain accounts
✔ This created the impression that cheques are essential
2. BUT This View Was Rejected (Important Cases)
Key Case: No Need for Cheques
From:
- R v Industrial Disputes Tribunal, ex parte East Anglian Trustee Savings Bank
👉 The court held:
✔ A bank can still be a banker
❌ Even if it does NOT issue cheque books
3. Supporting Cases (Flexible Approach)
Also supported by:
- Re Bottomgate Industrial Co-operative Society
- State Savings Bank of Victoria, Commissioners v Permewan, Wright & Co Ltd
👉 These cases show:
✔ Cheques are NOT essential
✔ Methods of banking can vary
4. Why courts say cheques are not necessary (Simple explanation)
👉 Because banking evolves
Today:
- Online transfers
- Mobile payments
- Digital banking
👉 Replace cheques
So courts focus on:
✔ Function (handling money)
NOT
❌ Form (cheques specifically)
5. Link to Malaysian Law
Under:
- Financial Services Act 2013
👉 “Paying and collecting cheques” is mentioned
BUT
👉 Courts interpret this flexibly
✔ Includes modern payment systems
6.
Although earlier cases such as United Dominions Trust v Kirkwood identified cheque handling as a characteristic of banking, later cases such as R v Industrial Disputes Tribunal, ex parte East Anglian Trustee Savings Bank established that cheque facilities are not essential. The courts now adopt a functional approach, recognising modern payment methods as substitutes
7. Final Rule
Cheque handling is not an essential requirement of banking; what matters is the institution’s role in managing customer funds and facilitating payments, whether through traditional or modern means.
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Malaysian Banking Law: Final Definition of a “Banker”
Comprehensive Legal Definition
A banker is a person, partnership, or corporation whose principal or predominant business is to accept money from the public as deposits (repayable on demand or at agreed times), maintain an ongoing account relationship enabling deposits and withdrawals, and utilise those funds by providing loans or other financial services, and who is recognised or authorised under the law to carry on such banking business.
How This Definition Was Built
1. Core Function (Foundation of Banking)
From:
2. Continuous Relationship (Not One-Off Activity)
From:
3. Traditional Characteristics (Guidelines, not strict rules)
👉 Usually involves:
❌ Cheques are not essential today
❌ Methods can change (digital banking)
4. Flexibility of Definition
From:
👉 Banking evolves over time
✔ So definition must be broad and adaptable
5. Statutory Position (Malaysia)
From:
6. What is NOT a Banker (Very Important)
From your cases:
👉 Not every lender is a banker
7. Supporting Activities Are Not Banking
From your cases:
8. Modern Understanding (Very Important)
👉 A banker today is:
Final Simplified Definition
A banker is a licensed financial institution whose main business is to accept deposits from the public, maintain accounts for customers, and use those funds to provide loans and other financial services as part of a continuous banking system.
Ultimate Takeaway
A banker is defined by function (deposit-taking + financial intermediation), continuity (ongoing relationship), and legal recognition (licensing)—not merely by lending money.
If you want, I can now turn this into a perfect essay answer (with intro, cases, and conclusion) or a one-page revision cheat sheet.
Comprehensive Legal Definition
A banker is a person, partnership, or corporation whose principal or predominant business is to accept money from the public as deposits (repayable on demand or at agreed times), maintain an ongoing account relationship enabling deposits and withdrawals, and utilise those funds by providing loans or other financial services, and who is recognised or authorised under the law to carry on such banking business.
How This Definition Was Built
1. Core Function (Foundation of Banking)
From:
- State Savings Bank of Victoria, Commissioners v Permewan, Wright & Co Ltd
- Receives deposits
- Uses those deposits (mainly lending)
2. Continuous Relationship (Not One-Off Activity)
From:
- United Dominions Trust Ltd v Kirkwood
- Maintains accounts
- Handles ongoing transactions
3. Traditional Characteristics (Guidelines, not strict rules)
👉 Usually involves:
- Accepting deposits
- Paying/collecting cheques
- Keeping current accounts
❌ Cheques are not essential today
❌ Methods can change (digital banking)
4. Flexibility of Definition
From:
- Bank of Chettinad Ltd of Colombo v IT Commissioners of Colombo
👉 Banking evolves over time
✔ So definition must be broad and adaptable
5. Statutory Position (Malaysia)
From:
- Financial Services Act 2013
- Be licensed (Section 10)
- Carry on banking business (Section 2)
6. What is NOT a Banker (Very Important)
From your cases:
- Vernes Asia Ltd v Trendale Investment Pte Ltd
→ Lending alone ≠ banker - Sabah Development Bank Bhd v SKBS (Sabah) Sdn Bhd
→ Financier ≠ banker - Light Style Sdn Bhd v KFH Ijarah House (Malaysia) Sdn Bhd
→ Financing alone ≠ banking business
👉 Not every lender is a banker
7. Supporting Activities Are Not Banking
From your cases:
- Bank of China v Lee Kee Pin
→ Debt recovery ≠ banking - Koh Kim Chai v Asia Commercial Banking Corporation Limited
→ Taking/enforcing security ≠ banking
8. Modern Understanding (Very Important)
👉 A banker today is:
- A financial intermediary
- A custodian of funds
- A provider of financial services
- A regulated institution
Final Simplified Definition
A banker is a licensed financial institution whose main business is to accept deposits from the public, maintain accounts for customers, and use those funds to provide loans and other financial services as part of a continuous banking system.
Ultimate Takeaway
A banker is defined by function (deposit-taking + financial intermediation), continuity (ongoing relationship), and legal recognition (licensing)—not merely by lending money.
If you want, I can now turn this into a perfect essay answer (with intro, cases, and conclusion) or a one-page revision cheat sheet.
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KembaraXtra – Indian Evidence Law – Bharatiya Sakshya Adhiniyam – When Oral Admissions as to Contents of Documents are Relevant (Section 20)
1. General Rule
2. When Oral Admissions are NOT AllowedOral admission is inadmissible:
3. Exceptions (When Oral Admissions ARE Relevant)(a) As Secondary Evidence
(b) When Genuineness of Document is in Question
4. Key Principle👉 Contents of a document must be proved by the document itself, not by oral statements.
Quick Revision Line👉 Oral admissions about documents are generally excluded, except when secondary evidence is allowed or genuineness is in dispute.
1. General Rule
- Oral admissions about contents of a document are NOT relevant
- Reason:
👉 Best evidence rule → Document itself must be produced
2. When Oral Admissions are NOT AllowedOral admission is inadmissible:
- ❌ When the document exists and can be produced
- ❌ When a party tries to prove contents without producing the document
- A executes mortgage deed in favour of B
- B files suit but does not produce the document
- B cannot rely on oral statement to prove contents
👉 Must produce and prove the actual document
3. Exceptions (When Oral Admissions ARE Relevant)(a) As Secondary Evidence
- Allowed when party is entitled to give secondary evidence
- Example situations:
- Original document is lost or destroyed
- Document is in possession of opposite party
- Oral account by a person who has seen the document is admissible
(b) When Genuineness of Document is in Question
- Oral admissions are relevant when:
👉 Issue = whether document is genuine or forged - Helps in proving validity or invalidity of document
4. Key Principle👉 Contents of a document must be proved by the document itself, not by oral statements.
Quick Revision Line👉 Oral admissions about documents are generally excluded, except when secondary evidence is allowed or genuineness is in dispute.
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KembaraXtra – Indian Evidence Law – Bharatiya Sakshya Adhiniyam – Admissions by Persons Expressly Referred (Section 18)
1. General Rule
2. Meaning of “Expressly Referred”
3. Example
4. Key Principle👉 When a party refers another person for information, he is deemed to approve that person’s statement in advance.
5. Scope of “Information”
6. Case Law Principle
7. Self-Regarding Statements (Concept Link)(a) MeaningStatements relating to one’s own interest:
(b) Rule
8. Link with Section 19
Quick Revision Line👉 If you tell someone to “ask X”, you are bound by what X says.
1. General Rule
- Statements made by a person expressly referred by a party for information are admissions
- Such statements become binding on the party making the reference
- By referring someone, the party adopts that person’s statement as his own
2. Meaning of “Expressly Referred”
- A party clearly directs the other party to seek information from a third person
- That person’s statement is treated as admission of the referring party
3. Example
- A sells horse to B
- B doubts horse’s condition
- A says: “Ask C, he knows everything”
👉 C’s statement = Admission against A
4. Key Principle👉 When a party refers another person for information, he is deemed to approve that person’s statement in advance.
5. Scope of “Information”
- Not limited to unknown facts
- Includes opinions, knowledge, or statements relevant to dispute
- Even if Court seeks clarification through such person → still covered
6. Case Law Principle
- If a party agrees to rely on someone’s statement (even conditionally),
👉 He becomes bound by that statement
7. Self-Regarding Statements (Concept Link)(a) MeaningStatements relating to one’s own interest:
- Self-serving → in favour of maker
- Self-harming → against interest of maker
(b) Rule
- Self-harming statements → admissible
- Self-serving statements → generally NOT admissible
- People are unlikely to lie against their own interest
- But may easily make statements to benefit themselves
8. Link with Section 19
- Section 18 + 19 together:
👉 Admissions are generally used against the maker
👉 Not in his favour (except exceptions)
Quick Revision Line👉 If you tell someone to “ask X”, you are bound by what X says.